AMC To Cut Ties With Studio Over Direct-To-Home Releases

When AMC-owned Showplace 16 and Showplace 14 eventually re-open, they most likely will not being showing films distributed by Universal.

That's because Universal Pictures, the company behind "Trolls World Tour," decided (after seeing movie theaters around the country being shuttered due to the COVID-19 pandemic) to release their film directly to video-on-demand. That move paid off financially, but may have cost them a relationship with the nation's largest theater chain.

According to the Wall Street Journal, in three weeks of $20 on-demand rentals, “Trolls World Tour” has grossed about $95 million. The studio, which normally splits sales approximately in half with theaters, pocketed about $75 million of that. A spokesman for Universal did not dispute those figures.

Universal calls the “Trolls World Tour” digital release a success and suggests it may be the beginning of a sea change in how movies are released. Theater owners strenuously disagree. AMC Theaters, the largest chain in the United States, is signaling an all-out war, saying it will no longer show Universal movies.

The National Association of Theater Owners (NATO) is not at all happy with Universal's move, instead touting the movie theater experience over home video releases, and pointing out that lots of families would have gone to see the Trolls movie in theaters if it hadn't been for the COVID-19 lockdown.

AMC Theaters CEO Adam Aron is seriously angry at Universal's move, and plans to take action.

US News:

Aron said his company would sever relations with Universal, effective Tuesday. He insisted the policy would continue once theaters reopened, would apply to its venues around the world and “is not some hollow or ill-considered threat."

Aron said AMC would do the same to any distributor that “unilaterally abandons current windowing practices absent good faith negotiations between us.” He declared absent further discussions, "decades of incredibly successful business activity together has sadly come to an end.”

Late Tuesday, Universal responded it was disappointed with the AMC and NATO statements. “We absolutely believe in the theatrical experience and have made no statement to the contrary,” Universal said, adding it would consider video on demand "when that distribution outlet makes sense.”